CORPORATE GOVERNANCE

June 5, 2024
dip Corporation
Representative: Hideki Tomita,
Representative Director, President and CEO (Chief Executive Officer)
Contact: +81-3-5114-1177
Stock code: 2379
https://www.dip-net.co.jp/en/

Corporate governance at dip Corporation is as follows:

I. Basic Approach to Corporate Governance and Capital Structure, Corporate Attributes and Other
Basic Information
1. Basic Approach(Update)Through the provision of human resource services and DX services, and by working to solve various
problems in the labor market, dip aims to realize a society in which everyone can experience the joy
and happiness of work, based on a vision of becoming a “Labor force solution company” under the
corporate philosophy of “tapping into dreams, ideas and passion to create a better society.”
Ensuring effective corporate governance is essential to realizing this vision. Under an appropriate
corporate governance system, we aim to increase medium and long-term corporate value while
fulfilling our responsibilities to all stakeholders by enhancing management transparency andconducting efficient corporate operations.
dip has transitioned from a company with an Audit & Supervisory Board to a company with an Audit& Supervisory Committee with the resolution of the 26th Annual General Meeting of Shareholders
held on May 24, 2023. Its aim is to strengthen the auditing and supervision of executive directors andfurther enhance its system of corporate governance by making Audit & Supervisory Committee
members, who are responsible for auditing the execution of duties by board directors, members of theBoard of Directors.

(1) Board of Directors
The Board of Directors, which is the management decision-making organ, consists of nine directors
who possess a high degree of expertise and broad knowledge based on extensive experience. Board
meetings are held on a monthly basis, in principle, and extraordinary Board meetings are held whenneeded to discuss and decide important management matters. Based on the basic policy that the ratio
of independent outside directors on the Board of Directors should be at least two-thirds and the ratioof female directors should be half, six out of nine directors are outside directors, and we will strengthen

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the supervisory function of management by appointing outside directors who are independent fromthe management and controlling shareholders to two-thirds of the Board of Directors.

Chairperson:

Hideki Tomita, Representative Director, President and CEO

Board members:

Masatsugu Shidachi, Representative Director and COO, Kuniyoshi Mabuchi,
Kanae Takeuchi, and Yuka Shimada, Outside Directors; Kazuhisa Iwata,
Director and Full-time Audit & Supervisory Committee Board Member; and Eriko
Tanabe, Yukiko Imazu, and Misae Maruyama, Outside Director Audit &Supervisory Committee Members(2) Audit & Supervisory Committee
The Audit & Supervisory Committee consists of three outside directors who possess a high degreeof expertise and broad knowledge based on extensive experience. Committee meetings are held on
a monthly basis, in principle, and extraordinary Committee meetings are held when needed. The
Audit & Supervisory Committee discusses matters stipulated by law and the Articles of Incorporation,
conducts significant audit operations in accordance with the audit policy set forth by the Committee
and strives to enhance the system for audit and supervision. Board directors who are Audit &Supervisory Committee members attend important meetings, such as Board meetings, to audit thelegality and supervise the adequacy of board directors’ execution of duties.

Chairperson:

Kazuhisa Iwata, Director and Full-time Audit & Supervisory Committee
Board Member

Committee members:

Eriko Tanabe, Yukiko Imazu, and Misae Maruyama, Outside Director Audit& Supervisory Committee Members(3) Voluntary Nomination and Compensation Committee
The Nomination and Compensation Committee, a voluntary advisory body to the Board of Directors,
deliberates and reports on matters related to director nominations and compensation in response toinquiries from the Board of Directors.
The Committee comprises the representative director, president and CEO and independent outsideboard directors. The latter must account for a majority of the Committee members, and the Committee
must be chaired by an independent outside board director.
Chairperson:

Kuniyoshi Mabuchi, Independent Outside Director

Committee members: Hideki Tomita, Representative Director, President and CEO; Kanae
Takeuchi and Yuka Shimada, Independent Outside Directors; and Eriko
Tanabe, Yukiko Imazu, and Misae Maruyama, Independent Outside Director

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Audit & Supervisory Committee Members(4) Corporate Officers Meeting
dip has introduced a corporate officer system to expedite decision-making and ensure smooth
execution and has established the Corporate Officers Meeting, which primarily comprises
Representative Director, Director, Full-time Audit and Supervisory Committee Member, and corporate
officers. The Corporate Officers Meeting is held every week, in principle, to share information anddiscuss key matters.

(5) Strategy Promotion Council
dip has established the Strategy Promotion Council, which discusses the agenda of the Corporate
Officers Meeting in advance, to support swift management decision-making. It is attended byexecutive directors. The Strategy Promotion Council meets every week, in principle, to share
information and discuss business execution matters.

dip is determined to continue its efforts to pursue healthy and transparent corporate management
and further improve and enhance its corporate governance in the future.

[Reason for Non-compliance with the Principles of Japan’s Corporate Governance Code]
dip complies with all principles (including those for the Prime Market) of Japan’s Corporate
Governance Code that was revised in June 2021.

[Disclosure Based on the Principles of Japan’s Corporate Governance Code](Update)The following statements are based on the Corporate Governance Code that was revised in June
2021.

[Principle 1.4 (Cross-Shareholdings)]
dip does not have cross-shareholdings with listed companies simply for the objective of deepening
business relationships.
dip holds two investment shares for other than pure investment purposes. dip verifies theappropriateness of its holdings by regularly reporting on the performance and future prospects of eachstock held by the Company at meetings of the Board of Directors and other meetings.

[Principle 1.7 (Related Party Transactions)]
When dip enters into a related party transaction with an officer or a major shareholder, etc., a priorreport to the Board of Directors is made, and approval from the Board of Directors must be obtained

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in accordance with the "Related Party Transaction Guidelines" established by the Board of Directors.
When approving such transactions, the Board of Directors compares the terms and conditions of thetransaction with those of general transactions, etc., to prevent its deliberations from becoming
arbitrary and ensure that the transaction is not unfavorable to the Company.
Individuals who conduct such transactions must report the details to the Audit & Supervisory
Committee to receive an audit on the legality of the transaction.
Furthermore, dip requires its board directors to submit a “Confirmation on Related Party
Transactions” on a quarterly basis to ensure the effectiveness of the above Guidelines.
When dip enters into a transaction involving a conflict of interest with an officer or a company forwhich an officer serves as a representative director, prior approval from both the Board of Directors
the Audit & Supervisory Committee must be obtained in accordance with the Companies Act and theBoard of Director Regulations.

[Supplementary Principle 2.4.1 (Ensuring Diversity in Appointing Key Personnel)]
dip appoints personnel based on their capabilities and performance, irrespective of their gender or
nationality. We believe that it is important to respect diverse viewpoints and values in order to realize
medium and long-term increase in corporate value, and we actively recruit human resources withdifferent experiences and skills while creating a workplace environment that facilitates their activities.
In addition, we welcome many new graduates every year, placing great importance on theirdevelopment, and giving them opportunities to play an active role regardless of gender. Consequently,
as of February 2024, the percentage of women in management positions is 45.2% for employees
promoted from new graduates to management positions, and 36.3% overall, including mid-careerhires. Going forward, we will continue to set important management indicators for promoting theactivities of female managers, such as employee satisfaction regarding the working style of female
managers, with the goal of first increasing the ratio of women among employees promoted from new
graduates to managers to 50%.
We are also actively promoting mid-career hires to management positions, and as of February 2024,
mid-career hires accounted for 46.0% of all management positions. We will continue to create anenvironment in which all employees, regardless of whether they are new graduates or mid-careerhires, can play an active role.
We will also be more proactive in promoting foreign nationals to management positions.

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・Gender Ratio of Employees Promoted from New Graduate to Management Post

Female

Male

45.2%

54.8

・Gender Ratio and New Graduate/Mid­Career Ratio of All Management Posts

FemaleMid­career
Male

36.3%

New graduate

54.0%

63.7%

46.0%

Given the decrease in the working­age population associated with an aging population and a
declining birth rate, as well as increasing diversity in terms of the need for workers to balance theirchildcare/nursing care responsibilities with their work, it has become important in recent years forcorporations to create working environments that are able to accommodate diverse working styles.
Efforts are underway at dip to promote work style reforms, including the achievement of work­life
balance and diversity at work, with the aim of enabling employees to work flexibly according to theirlifestyles and establishing a work environment in which every employee can demonstrate their job
performance to the fullest. The status of our efforts in these areas is posted on our corporate website
at the following URL.
(Promotion of Work Style Reforms and Diversity at Work)https://www.dip­net.co.jp/en/esg/society/S004[Principle 2.6 (Roles of Corporate Pension Funds as Asset Owners)]
dip has not introduced a corporate pension plan. Note that dip has introduced a defined contribution
pension plan to ensure stable asset formation for its employees, and provides employees witheducation and training, such as internal seminars on asset formation and investment management.

[Principle 3.1 (Full Disclosure)] 【Update】
dip actively discloses information, recognizing the disclosure of useful information for shareholders

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and other stakeholders as an important managerial issue.

(1) Through the provision of human resource services and DX services, and by working to solve
various problems in the labor market based on a vision of becoming a “Labor force solution company,”
dip aims to realize a society in which everyone can experience the joy and happiness of work. Undera corporate philosophy of “tapping into dreams, ideas and passion to create a better society,” dip will
strive to realize a sustainable society through its business activities.
Please refer to the following link for dip’s philosophy.
< Philosophy>
https://www.dip-net.co.jp/en/company/philosophy(2) Please see “1. Basic Approach” above for dip’s basic approach and basic policy on corporate
governance.

(3) Specific details of the policies and procedures for the Board of Directors to determine theremuneration of senior management and directors are disclosed in the Notice of Convocation of theGeneral Meeting of Shareholders and the Annual Securities Report.

(4) The appointment of board directors and Audit & Supervisory Committee members is decided by aresolution of the general meeting of shareholders in response to a proposal of candidates nominatedby a resolution of the Board of Directors after the Representative Director, President and Chief
Executive Officer (CEO) or another board director refers the candidates to the Board of Directors
following confirmation that the candidates meet the basic policy for appointment as stated below.
The nomination of board director candidates takes into account the opinions of the Nomination andCompensation Committee, a voluntary advisory body to the Board of Directors where independent
outside board directors account for a majority of the members.
Proposals on the appointment of Audit & Supervisory Committee members are submitted to thegeneral meeting of shareholders after obtaining the consent of the Committee.
The Board of Directors decides the candidates after considering the appropriate balance of thediverse knowledge and experience expected of such board directors and Audit & Supervisory
Committee members. It ensures that outside board directors account for at least two-thirds of theBoard of Directors.
The basic policy for appointment is as stated below.

<Executive directors and outside board directors (excluding those who are Audit &Supervisory Committee members）>

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CORPORATE GOVERNANCE

dip’s basic policy for appointing executive directors requires the candidates to, among others,
possess the broad knowledge and experience necessary for making corporate managerial decisions.
dip’s basic policy for appointing outside board directors requires the candidates to be able tooversee and supervise business management of the Company through important decision-making at
the Board of Directors meetings, oversee whether there is any conflict of interest between the
Company, management and controlling shareholders, and actively make recommendations
concerning management policies and management improvements in order to advance medium/longterm corporate value. As of May 23, 2024, Mr. Kuniyoshi Mabuchi, Ms. Kanae Takeuchi, and Ms. Yuka
Shimada were appointed as outside board directors (excluding board directors who are Audit &Supervisory Committee members).

The dismissal of board directors (excluding those who are Audit & Supervisory Committee
members) is decided by a resolution of the general meeting of shareholders after the Board of
Directors passes a resolution on the candidate for dismissal following timely and appropriatedeliberation in light of the basic policies on the appointment of executive directors and outside board
directors.

<Board directors who are Audit & Supervisory Committee members>
With the aim of reinforcing audit and supervisory functions, dip’s basic policy for appointing board
directors who are Audit & Supervisory Committee members is to appoint individuals with experiencein corporate management, individuals with knowledge and experience in corporate finance,accounting and legal affairs as a certified public accountant, those who are practicing tax accountantsor lawyers, or individuals with considerable knowledge and experience in risk management. As of May
23, 2024, Ms. Eriko Tanabe, Ms. Yukiko Imazu, and Ms. Misae Maruyama have been appointed as
outside board director Audit & Supervisory Committee members.
The dismissal of board directors who are Audit & Supervisory Committee members is decided by aresolution of the general meeting of shareholders after the candidate for dismissal is decided by aresolution of the Board of Directors following its timely and appropriate deliberation in view of the basic
policies on the appointment of board directors who are Audit & Supervisory Committee members.

(5) The reasons for the appointment of board directors (excluding those who are Audit & Supervisory
Committee members) and board directors who are Audit & Supervisory Committee members aredisclosed in the Notice of Convocation of the Annual General Meeting of Shareholders and in the
Securities Reports, among others.

[Supplementary Principle 3.1.3 (Initiatives on Sustainability)]

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CORPORATE GOVERNANCE<Initiatives on Sustainability>
Since our founding, we have been contributing to society by solving social issues through ourbusiness activities under our corporate philosophy of “tapping into dreams, ideas and passion tocreate a better society.” In addition to our efforts to improve social issues related to employment ingeneral, whether fixed term or permanent, and labor productivity, we will work to develop humanresources, promote the advancement of women in the workplace, protect human rights, ensure DEI(diversity, equity, and inclusion), and address climate change to achieve continuous growth andadvance corporate value further. By doing so, we will contribute to solving social issues and realize asustainable society.
Since 2019, we have proactively disclosed information on our activities concerning ESG(environment, society and governance). As a result, dip has been included in FTSE Blossom Japan
Index, a stock index composed of Japanese companies that meet global ESG standards, for threeconsecutive years.
In March 2022, dip was included in the FTSE Blossom Japan Sector Relative Index, a new index
created by FTSE Russell to evaluate companies’ environmental impact and initiatives to promote thetransition to a decarbonized economy and address climate change. In June 2022, dip was selected
as a constituent of MSCI Japan ESG Select Leaders Index, a major ESG index, and MSCI Japan
Empowering Women Index (WIN) for the first time. With these selections, dip is a constituent of all
five indexes that have been adopted by the Government Pension Investment Fund (GPIF) to manage
its investments. Furthermore, dip has been rated AA, the second highest, in MSCI’s ESG rating.
For further details on dip’s approach and initiatives on sustainability, please refer to our corporatewebsite (https://www.dip-net.co.jp/en/esg/), Integrated Report, and Securities Report (available inJapanese only).

<Initiatives Concerning Human Capital>
dip considers managing the health of its employees as an important theme that has a direct effecton work productivity and the well-being of employees. It is aimed not only at “preventing illness” butalso at “becoming happier and more vigorous.” With this in mind, dip promotes health and productivity
management based on a concept of “conditioning the mind and body.” dip has assigned theRepresentative Director, President and CEO as the health and productivity manager and theRepresentative Director and COO as the health and productivity promotion manager, and establishedthe Health and Productivity Promotion Committee under their direct control. The details of the
discussions by the Committee are reported to the Board of Directors and the Management Meetingon a regular basis. With the aim of enabling its health and productivity management to reflect theopinions of its employees, dip has also appointed a Health and Productivity Management Promotion
Leader from each office as members of the Committee.

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CORPORATE GOVERNANCEIn March 2024, dip was included in the “White 500 Corporations for Excellent Health Management
2024,” the top 500 “Corporations for Excellent Health Management 2024” selected by the Ministry of
Economy, Trade and Industry and the Japan Health Council in recognition of our initiatives in healthmanagement. This is the second consecutive year that the company has been recognized as amember of the White 500.
For further details on dip’s approach and initiatives on human capital, please refer to our corporatewebsite (https://www.dip-net.co.jp/en/esg/society/S003), Integrated Report, and Securities Report(available in Japanese only).

<Disclosure Based on the TCFD Framework>
dip has expressed its support for the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD). Based on the recommendations of the TCFD, dip will analyze the risks
and opportunities to its business posed by climate change, reflect them in its management strategies,
disclose information from the four perspectives of governance, strategy, risk management, andindicators, and further strengthen and promote its environmental initiatives. dip will also promotedialogue with its stakeholders and contribute to the creation of a sustainable society.
For further details on dip’s TCFD initiatives, please refer to our corporate website (https://www.dipnet.co.jp/en/esg/environment/E004), Integrated Report, and Securities Report (available in Japaneseonly).

[Supplementary Principle 4.1.1 (Matters for Resolution by the Board and Scope of Delegation)]
dip specifies in its Board of Director Regulations which matters must be decided by a resolution of
the Board of Directors. Specifically, they include matters concerning the general meeting ofshareholders, results, board directors, shares and bonds, basic management policies, humanresources and the organization, assets and funds, subsidiaries, and other matters stipulated by law
such as the Companies Act or any equivalent matters.
Following its transition to a company with an Audit & Supervisory Committee on May 24, 2023, dip
has reviewed its scope of delegating authority over business execution to executive directors toestablish a system that expedites decision-making and facilitates business execution by the executive
directors. dip will continue to improve its business execution system by revising which matters should
be delegated and the scope of delegation in accordance with the scale, importance and risks of thetransaction.

[Principle 4.9 (Independence Standards and Qualification for Independent Outside Board
Directors)]
To ensure that supervision and advice are appropriately provided by independent outside board

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directors, dip has established Standards on Independence of Outside Officers and nominatescandidates for independent outside board directors who are not only independent but also possess
the expertise and experience in business strategy to enable them to actively offer frank andconstructive recommendations at Board of Directors meetings.
The Standards on Independence of Outside Officers are disclosed in this Corporate Governance
Report.

[Supplementary Principle 4.10.1 (Independence of Composition, Authority, Roles, etc. of
Nomination and Compensation Committee)]
In order to strengthen the independence, objectivity and accountability of the Board of Directors'
functions, the Company has established the Nominating and Compensation Committee, which is anindependent, voluntary advisory body to the Board of Directors, comprising independent outside
directors in the majority. Entrusted by the Board of Directors, the Committee determines individual
director compensation (excluding that for board directors who are Audit & Supervisory Committee
members) and also deliberates and reports on matters related to director candidate nominations anddirector compensation in response to inquiries from the Board of Directors.

[Supplementary Principle 4.11.1 (Preconditions for Board Effectiveness)]
Based on a deliberation of the diversity and appropriate size of the Board of Directors, dip’s Boardof Directors consists of executive directors, who have deep knowledge of dip’s business andoperations and can conduct agile business execution, outside board directors (excluding board
directors who are Audit & Supervisory Committee members), who can be expected to provide
appropriate advice and supervision concerning business management of the Company based on ahigh level of expertise as well as a breadth of knowledge and experience, and board directors who
are Audit & Supervisory Committee members, who can perform appropriate audits and supervision of
the execution of duties by executive directors based on a high level of expertise as well as a breadthof knowledge and experience.
The basic policy concerning the Board of Directors is to decide on candidates after considering theappropriate balance of the diverse knowledge and experience expected of the board directors, and tohave at least two-thirds of the Board composed of independent outside board directors and 50% of
the Board composed of women.
The basic policy for appointing executive directors requires the candidates to, among others,
possess the broad knowledge and experience necessary for making corporate managerial decisions.
The basic policy for appointing independent outside board directors is to appoint individuals who
can fulfill management oversight and supervisory functions through important decision-making at
Board of Directors meetings as well as oversee any conflict of interest between the Company and its

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management and controlling shareholders, and actively make recommendations concerning
management policies and management improvements to enhance medium/long-term corporate
value.
The basic policy for appointing board directors who are Audit & Supervisory Committee members
is to appoint individuals with experience in corporate management, individuals with knowledge andexperience in corporate finance, accounting, and legal affairs as a certified public accountant, those
who are practicing tax accountants or attorneys, and individuals with considerable knowledge andexperience in risk management, in order to reinforce audit and supervisory of executive directors’
execution of duties.
dip’s Board of Directors is well balanced and diverse in terms of knowledge, experience andcapabilities as a result of appointing individuals with diverse and extensive experience as directors.
We will strive to ensure that the Board functions effectively and efficiently by promoting in-depth
examinations and swift decision-making through active discussions.
The skill matrix of the Board of Directors and the Audit & Supervisory Committee is disclosed in the
Notice of Convocation of Annual General Meeting of Shareholders, in the Securities Report (available
in Japanese only), and on the final page of this Corporate Governance Report.

[Supplementary Principle 4.11.2 (Concurrent Positions of Outside Officers)] 【Update】
Outside Director Mr. Kuniyoshi Mabuchi concurrently serves as an outside board director of one
listed company and outside board director who is an Audit & Supervisory Committee member ofanother listed company; however, we believe this to be a reasonable number of listed companies atwhich to concurrently serve as an officer. Outside Director Ms. Kanae Takeuchi concurrently serves
as an outside board director of one listed company; however, we believe this to be a reasonable
number of listed companies at which to concurrently serve as an officer. Yuka Shimada, an Outside
Director, does not concurrently serve as an officer of any other listed company. Each of them arevigorously engaged in their duties at the Company, such as actively making recommendations on the
Company’s business and operations at the Board of Directors meetings and the Nomination andCompensation Committee.
Ms. Eriko Tanabe, who was appointed as an Outside Director, is also a member of the Audit andSupervisory Committee,

Ms. Yukiko Imazu, who was newly appointed as an outside board director

who is an Audit & Supervisory Committee member on the same date, concurrently serves as an
outside auditor of one listed company and an outside board director of another listed company. Ms.
Misae Maruyama concurrently serves as an outside full-time auditor of one listed company; however,
we believe the above to be a reasonable number of listed companies at which to concurrently serveas an officer.
The positions at other listed companies held concurrently by dip’s board directors (excluding those

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who are Audit & Supervisory Committee members) and board directors who are Audit & Supervisory
Committee members as officers, are stated in the Notice of Convocation of Annual General Meetingof Shareholders and in the Securities Reports (available in Japanese only).

[Supplementary Principle 4.11.3 (Evaluation of Board Effectiveness)] 【Update】
In order to improve the effectiveness of our Board of Directors, an evaluation is carried out on a
yearly basis. In May 2022, interviews with all board directors and corporate auditors were conducted
to evaluate the effectiveness of dip’s Board of Directors and analyze issues surrounding the current
situation. As a result, the Board of Directors has been evaluated to be highly effective, fulfilling
appropriate roles and responsibilities in supervision and decision-making relating to the execution ofduties. Based on the results of the analysis, dip has formulated and implemented measures to further
improve the effectiveness of the Board. The specific initiatives based on the effectiveness evaluation
for FY’23/2 are as detailed below. In FY’24/2, we are working to improve the effectiveness of the Boardof Directors by considering and formulating measures to further improve its performance.

<Initiatives based on the effectiveness evaluation in May 2022>
・Consideration of the corporate governance structure(1) dip has transitioned from a company with an Audit & Supervisory Board to a company with an
Audit & Supervisory Committee with the resolution at the 26th Annual General Meeting of
Shareholders held on May 24, 2023. Its aim is to strengthen the auditing and supervision of
executive directors and further enhance its system of corporate governance by making Audit &Supervisory Committee members, who are responsible for auditing the execution of duties byboard directors, members of the Board of Directors.
(2) Based on a deliberation of the diversity and appropriate size of the Board of Directors, dip’s Boardof Directors consists of executive directors, who have a deep knowledge of dip’s business andoperations and can conduct agile business execution, outside board directors (excluding board
directors who are Audit & Supervisory Committee members), who can be expected to provide
appropriate advice and supervision concerning business management of the Company based ona high level of expertise as well as a breadth of knowledge and experience, and board directors
who are Audit & Supervisory Committee members, who can perform appropriate audits andsupervision of the execution of duties by executive directors based on a high level of expertise
as well as a breadth of knowledge and experience. As of May 23, 2024, the Board of Directors
remains highly independent and diverse, with six of the nine board directors being independent
outside board directors, five of whom are women.
(3) By making all of the independent outside directors members of the voluntary Nomination andCompensation Committee, we have strengthened the involvement of independent outside

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directors in the decision-making process for director nominations and compensation.
・Establishment of an internal control and risk-taking environment
We have established risk assessment items to perform appropriate risk assessment of information
assets held by the Company.
・Support for and enhancement of discussions at Board meetings
We have developed an environment that facilitates in-depth discussions at Board meetings by
establishing discussion items as agenda items of the Board of Directors.
・Practical operation of successor plans
We have selected candidates for corporate officers and provided training to reinforce the executive
system.

[Supplementary Principle 4.14.2 (Disclosure of Training Policy for Directors)]
dip provides its board directors with the opportunity to participate in internal training programs
offered by dip as well as external seminars on corporate governance. In the internal training sessions,board directors strive to acquire and enhance their knowledge to enable continuous growth at dip
through lectures by experts and discussions on themes that could become medium/long-term issues.
Outside board directors also strive to acquire and enhance their knowledge by conducting meetings
with corporate officers and discussing business strategies and service development.
dip assists board directors who are Audit & Supervisory Committee members in joining the Japan
Audit & Supervisory Board Members Association so that they can enhance their expertise and better
enable them to perform the roles and functions required of their position by obtaining the latest
information provided by the Association.

[Principle 5.1 (Constructive Dialogue with Shareholders and Investors)]〈Basic Philosophy〉
We recognize that two-way communication with our shareholders and investors, who are valued
stakeholders, is essential for our sustainable growth and for the enhancement of corporate value overthe medium to long term.
Based on this belief, we will strive to deepen the understanding of our shareholders and investors
and build long-term relationships of trust by proactively disclosing information regarding management
strategies and the business environment on our corporate website and by enhancing constructive
dialogue.

＜Communication between Shareholders and Interlocutor＞
The Company's management (Representative Director, President and CEO, Representative
Director, COO, Corporate Officer, CFO Head of Corporate Management Group) will oversee all

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aspects of our communication with shareholders and other stakeholders, and will strive to realize
constructive dialogue.
In addition, based on the wishes of shareholders and investors, other members of the management
team (Outside directors, Corporate officers, etc.) and the general manager of the Investor Relations
Division, will respond to requests and address the main concerns that arise from meetings.

＜Specific initiatives for constructive dialogue with shareholders＞(1)

Organic cooperation with internal divisions to support dialogue

When engaging in constructive dialogue with shareholders and investors, the division in charge ofinvestor relations will assist the interlocutor in cooperation with other divisions to provide accurate
information based on the interests of shareholders and investors.
In order to promote smooth dialogue with shareholders and others, the division in charge of investor
relations will hold regular meetings to collaborate and share information.

(2)

Efforts to Enhance Means of Dialogue

In addition to the General Meeting of Shareholders and individual meetings, we hold financial results
briefings and small meetings to explain our business status and strategies to our shareholders andinvestors.
Furthermore, we are working to promote dialogue by actively disclosing information on our corporatewebsite and enhancing Integrated Reports.

(3)

Internal Feedback Regarding the Content of Dialogue

Opinions, requests, concerns, etc. from shareholders and investors obtained through dialogue arecompiled by the Investor Relations Division and reported quarterly to internal stakeholders, including
management, at meetings of the Board of Directors, Corporate Officers Meeting, and othermanagement meetings. Matters of high importance or those requiring a prompt response are reported
to the CEO, COO, and other members of the management team on a case-by-case basis, without
waiting for quarterly reporting opportunities, and are addressed as appropriate.

(4) Management of Insider Information
When engaging in dialogue, we will comply with the separately stipulated "Rules for Management of
Inside Information and Insider Trading" and thoroughly manage insider information in accordance withthe "IR Policy".

Details on Constructive Dialogue with Shareholders and Investors our corporate website（https://www.dip-net.co.jp/en/ir/management-policy/governance）

14

CORPORATE GOVERNANCE【Principle 5-2 (Formulate and publish management strategies and plan)】＜Measures to realize management that is conscious of capital costs and stock prices＞ Disclosed
in English
In order to enhance corporate and shareholder value, we have established financial targets andcash allocation as financial strategies in our mid-term management plan "dip30th".
(1) Financial Strategy - Increase corporate and shareholder value by maximizing the equity spread.
To increase corporate and shareholder value, it is extremely important to continue to generate areturn on the capital entrusted to us by our shareholders that exceeds the cost of shareholders'equity. Therefore, we aim to maximize the equity spread by improving ROE and reducing the cost ofprincipal capital.
Prior to the pandemic ROE stood at 36.0% but declined to 2.0% in the fiscal year ending February
28, 2021 due to the various impacts of the pandemic. The ROE is expected to increase to 23.4% by
fiscal year end February 29, 2024, due to a stabilization of the situation as the pandemic subsides,
an increase in the market share of our media services, and improved profits resulting from highgrowth in the DX business. For the fiscal year ending February 2027, we aim to achieve an ROE
target of 30%. Although our ROE is already well above both the average of 9.24% (FY2022) for TSE
Prime listed companies and our cost of equity of approximately 10-11%, we have set our ROE target
for the final year of the medium-term management plan (ending February 28, 2027) at 30% in orderto maximize our equity spread and further increase corporate and shareholder value. While aiming
for profit growth to achieve the operating income target for the fiscal year ending February 28, 2027
(as published in the "dip30th" mid-term management plan), we aim to achieve the ROE target by
improving capital efficiency through balance sheet management efforts based on the following cash
allocation policy.

(2) Cash Allocation – (Fundamental Policy)

Cash allocation will be focused on investment in growth and shareholder returns.
(Growth Investment)
・Investment for growth of existing businesses and creation of new businesses
・Investment in research and development related to AI and other advanced technologies andtheir use in business・Investment to accelerate business growth, M&A etc.
(Shareholder Returns)
・In principle, the dividend amount for the previous fiscal year is set as the lower limit, and the15

CORPORATE GOVERNANCE

dividend payout ratio is maintained at 50%. Dividends are paid twice a year.
・Aim for a total return ratio of 65%.
・Consider additional shareholder return measures, taking into account cash position andother BS conditions, prospects for achieving financial targets, stock price level, and otherfactors●

The management of funds necessary for business operations is called Maximum Cash*, andin principle, excessive cash and deposits beyond that limit are not held. However, we do not makedecisions based on a single fiscal year, but carefully assess medium term investment opportunities,
and if there is excess cash and deposits, we return them to shareholders.
●

In a situation where it may be difficult to achieve the medium-term profit target, we willconsider additional shareholder returns to bring ROE closer to the target, taking into account the BS
situation, stock price level, and other factors.
※Maximum Cash Policy - 'The sum of three months' worth of payments, plus tax anddividend payments for the period.'
Initiatives to reduce the cost of shareholders' equity are as follows.
①

Build a business portfolio that is less susceptible to economic fluctuations②

Promote ESG-related initiatives③

Strengthen engagement with stakeholders through IR activities④

Implement a decision-making process for investment based on hurdle rates⑤

Introduce a business management system using ROIC for each business

Details of the "Formulation and Publication of Management Strategies and Management Plans" areposted on the Company's website at the links below.
〈Mid-term Management Plan〉https://www.dip-net.co.jp/en/ir/G006〈Integrated Report〉

https://www.dip-net.co.jp/ir/G007 （Japanese only）

2. Capital Structure
Percentage of shares held by foreign investors

20% or more but less than 30%[Major Shareholders] 【Update】
Name

Number of shares held

Percentage

Authenticity Co. Ltd.

20,340,000

35.66

The Master Trust Bank of Japan, Ltd.（Trust

6,828,700

11.97

3,018,900

5.29

account）
STATE STREET LONDON CARE OF STATE16CORPORATE GOVERNANCE

STREET BANK AND TRUST, BOSTON SSBTC
A/C UK LONDON BRANCH CLIENTS- UNITED
KINGDOM
The Custody Bank of Japan, Ltd. （ Trust

2,294,000

4.02

2,100,905

4.02

868,1421.52

643,519

1.13

Mitsubishi UFJ Morgan Stanley Securities Co.

595,491

1.04

SMBC Nikko Securities Inc.

593,100

1.04

ＳＴＡＴＥ ＳＴＲＥＥＴ ＢＡＮＫ ＷＥＳＴ

449,700

0.79

account）
The Master Trust Bank of Japan, Ltd. (Stock
Grant ESOP Trust Account 75525)
ＳＴＡＴＥ

ＳＴＲＥＥＴ

ＢＡＮＫ

ＡＮＤ

ＴＲＵＳＴ

ＣＯＭＰＡＮＹ

ＦＯＲ

ＳＴＡ

ＴＥ

ＳＴＲＥＥＴＡＴＩＯＮＡＬ
ＵＲＧ
ＯＦ
Ｔ

ＧＭＢＨ，

ＢＲＡＮＣＨ

ＩＴＳ
ＯＭＮＩ

ＴＨＥ

ＢＡＮＫ

ＬＵＸＥＭＢＯＯＮ

ＢＥＨＡＬＦ

ＣＬＩＥＮＴＳ：

ＣＬＩＥＮ

ＯＭ２５

ＢＡＮＫ

ＭＥＬＬＯＮＩＮＴＥＲＮ

ＯＦ

ＮＥＷ

ＹＯＲＫ

１４００４４

ＣＬＩＥＮＴ − ＴＲＥＡＴＹ ５０５ ２３４Name of controlling shareholder (excluding―

parent company)

Existence of parent company

None

Supplementary Information
1.

In addition to the above, there are 3,105,469 shares of treasury stock held by the Company.
Treasury stock has been deducted from the calculation of the percentage of shares held indicatedunder “Major Shareholders.”

2.

3,105,469 shares of treasury stock do not include 2,174,722 dip shares held by the Master Trust
Bank of Japan, Ltd. (2,100,905 shares held in the ESOP trust account and 73,817 shares held in
the BIP trust account).

3.

Authenticity Inc. is an asset management company of Hideki Tomita, Representative Director,
President and CEO.

4. Although Fidelity Investment Trust Co., Ltd. is listed as owning the following shares as of October

17

CORPORATE GOVERNANCE

31, 2023 in the substantial shareholding report (change report) made available for public
inspection on November 8, 2023, it is not included in the above list of major shareholders because
the Company is unable to confirm the number of shares actually held by the Company as ofFebruary 29, 2024.The contents of the report on large volume holdings (change report) are as
follows.

Name or Designation

Fidelity Investment Trust Co.

Address

7-7-7 Roppongi, Minato-ku, Tokyo

Number ofPercentage

shares heldof shares（shares）

held（％）

2,170,000

3.61

5. In the substantial shareholding report (change report) made available for public
inspection as of January 22, 2024, it is stated that M&G Investment Management
Limited (M&G Investment Management Limited) owns the following shares as ofJanuary 15, 2024. The Company is unable to confirm the number of shares actually
held by M&G Investment Management Limited as of February 29, 2024, and it istherefore not included in the above list of major shareholders.
The contents of the substantial shareholding report (change report) are as follows.

Name or Designation

Address

M&G Investment Management Ltd. 10 Fenchurch Avenue, London,(M&G

Investment

Number ofPercentage

shares heldof shares（shares）

held（％）

4,918,300

8.18Management EC3M 5AG, United Kingdom

Limited)

6. In the substantial shareholding report (change report) made available for public
inspection on February 7, 2024, it is stated that Capital Research and Management
Company owns the following shares as of January 31, 2024. The Company isunable to confirm the number of shares actually held by Capital Research andManagement Company as of February 29, 2024, and it is therefore not included in
the above list of major shareholders.
The contents of the substantial shareholding report (change report) are as follows.

Name or Designation

Address18

Number ofPercentage

shares heldof shares（shares）

held（％）

CORPORATE GOVERNANCE

Capital Research and Management 333 South Hope Street, Los

1,014,850

1.69

Company （ Capital Research and Angeles, California, United
Management Company）

States（333 South Hope Street,
Los Angeles, CA 90071,
U.S.A.）

3. Corporate Attributes
Stock exchange and section

Prime Market

Fiscal year-end

February

Industry

Services

Number of employees at the end of the previous

More than 1,000

fiscal year (consolidated)
Net sales during the previous fiscal year

More than ¥10 billion but less than ¥100 billion(consolidated)
Number of consolidated subsidiaries at the end

Less than 10of the previous fiscal year

4. Guidelines for Measures to Protect Minority Shareholders When Conducting Transactions with
Controlling Shareholder―

5. Other Particular Conditions That May Materially Affect Corporate Governance―

II. Management Organization and Other Corporate Governance Systems concerning Management
Decision-Making, Execution and Supervision
1. Matters related to Organization Structures and Organizational Operations
Organizational form

Company with Audit & Supervisory Committee

19

CORPORATE GOVERNANCE[Board Directors]
Number of board directors in Articles ofBoard directors (excluding those who are Audit &Incorporation

Supervisory Committee members): 11
Board directors who are Audit & Supervisory
Committee members: 5

Term of office for board directors in Articles ofBoard directors (excluding those who are Audit &Incorporation

Supervisory Committee members): 1 year
Board directors who are Audit & Supervisory
Committee members: 2 years

Chairperson of the Board of Directors

President

Number of board directors (Updated)

9

Appointment of outside board director

Appointed

Number of outside board directors

6

Number of outside board directors designated6

as independent officer

Relationship with the Company (1)Name

Association

Relationship with the Company*a

Kuniyoshi Mabuchi

From another company

Kanae Takeuchi

From another company

Yuka Shimada

From another company

Eriko Tanabe

From another company

Yukiko Imazu

Attorney

Misae Maruyama

Certified public accountant

b

c

d

e

f

g

h

i

j

k

* Choices regarding relationship with the Company.
a. An executive of a listed company or its subsidiaryb. An executive or a non-executive director of the parent company of a listed company
c. An executive of a sister company of a listed company
d. An individual whose major business client is a listed company or an executive of such individual
e. A major business client of a listed company or an executive of such business clientf. A consultant, accounting specialist, or legal professional who receives a substantial amount of money or assets inaddition to the customary remuneration from a listed company
g. A major shareholder of a listed company (In the case that such major shareholder is a corporation, an executive
thereof)h. An executive of a business client (that does not fall under any of (d), (e), or (f)) of a listed company [This applies to20

CORPORATE GOVERNANCE

the individual only.]i. An executive of a company whose outside officers are mutually assigned [This applies to the individual only.]
j. An executive of a company to which a listed company donates products, services, or money (This applies to theindividual only.]k. Other

Relationship with the Company (2)Name

Audit &

Independent

Supplementary

Supervisory

director

information

Reason for appointment

Committee
memberKuniyoshi Mabuchi〇

Mr. Kuniyoshi Mabuchi
promotes thereinforcement of thecorporate governancesystem based on his
extensive management
experience andprofound insight as the
manager of multiple
business corporations,
including global
companies. He also has
extensive experienceand a high level ofknowledge in the latest
technologies, such as
digital marketing and AI.
In addition to oversightand supervisory
functions as outsideboard director, we
expect him continue
leveraging his extensive
experience in corporate
management to provide
advice and21

CORPORATE GOVERNANCE

recommendations on
ensuring transparencyof the management
system and in the areasof marketing andtechnology.
Mr. Mabuchi has been
designated as anindependent officer of
dip since there is no riskof a conflict of interest
with generalshareholders as hemeets the Tokyo Stock
Exchange’s criteria for
independence.
Kanae Takeuchi〇

Ms. Kanae Takeuchi hasa high level ofknowledge in a broad
range of social issues,
including theadvancement of womenin the workplace,through her extensive
experience as abroadcaster for news
programs andinterviewer of corporate
executives. She
contributes to active
discussions at Board
meetings by pointing out
issues and providing
recommendations oncompliance and risk
management from an

22

CORPORATE GOVERNANCE

objective standpoint
fostered by her
extensive experience. In
addition to oversight andsupervisory functions as
an outside board
director, we expect her
to continue leveraging
her extensive insight insocial issues to provide
valuable advice onsocial issues that dip
strives to tackle, as wellas advice andrecommendations forreinforcing complianceand risk management.
Ms. Takeuchi has been
designated as anindependent officer of
dip since there is no riskof a conflict of interest
with generalshareholders as shemeets the Tokyo Stock
Exchange’s criteria for
independence.
Yuka Shimada〇

Ms. Yuka Shimada has
been supporting theestablishment of acorporate culture as apersonnel andadministration manager
of a global firm. As amanager of several
companies, she also

23

CORPORATE GOVERNANCE

works to instill wellbeing (a healthy andsound state of mind andbody) throughout
Japanese companies
and society and has
extensive experienceand profound insight inthe matter. In addition to
oversight andsupervisory functions as
an outside board
director, we expect her
to provide valuableadvice andrecommendations on
health and productivity
management and our
initiatives to enhance
the well-being of ouremployees so that we
can hire many people
now and in the future
and continue to growsustainably.
Ms. Yuka Shimada has
been designated as anindependent officer of
dip since there is no riskof a conflict of interest
with generalshareholders as shemeets the Tokyo Stock
Exchange’s criteria for
independence.
Eriko Tanabe〇〇

Having engaged in

24

CORPORATE GOVERNANCE

numerous projects
centering on the IT field
at TEMPSTAFF CO.,LTD. (now PERSOLTEMPSTAFF CO.,LTD.), including theconstruction of websites
and online systems
provided by said
company, Ms. Eriko
Tanabe has extensive
experience in businessand risk management.
Since May 2019, shehas, as an outsideboard director of dip,
provided advice andrecommendations andexercised oversight andsupervisory functions ontechnology, risk
management, andcorporate managementin general, including theadvancement of womenin the workplace.
Participates in the
Executive Officers
Meeting/Strategy
Promotion Meeting,
Sustainability Promotion
Meeting/Human Rights
Awareness Promotion
Meeting/Compliance
Promotion Meeting, andprovides advice from the25

CORPORATE GOVERNANCE

perspective oftechnology and risk
management, etc.
We expect her tocontinue leveraging her
broad insight gained
through her pastexperience and roles inthe supervision of dip’s
business management
to strengthen thedecision-making
functions of the Board of
Directors and audit andsupervisory functions
from an independent
standpoint.
Ms. Tanabe has been
designated as anindependent officer of
dip since there is no riskof a conflict of interest
with generalshareholders as shemeets the Tokyo Stock
Exchange’s criteria for
independence.
Yukiko Imazu〇○

As an attorney, Ms.
Yukiko Imazu has
extensive experienceand profound insight inpersonnel and laboraffairs as well as
corporate legal affairs,such as in thegovernance area, and26

CORPORATE GOVERNANCE

risk management. As afemale partner of her
law firm, she is also
engaged in theadvancement of womenin the workplace. Since
May 2022, she has, as
an outside board
director of dip, exercisedoversight andsupervisory overcorporate managementin general based on her
extensive experienceand profound insight.
Participates in the
Executive Officers
Meeting/Strategy
Promotion Meeting,
Sustainability Promotion
Meeting/Human Rights
Awareness Promotion
Meeting/Compliance
Promotion Meeting, andprovides advice from theperspective of risk
management, etc. We
expect her to continue
providing advice andrecommendations on
corporate governance,risk management, andthe advancement of
women in the workplacefrom an independent
standpoint and27

CORPORATE GOVERNANCE

strengthening audit andsupervisory functions.
Ms. Imazu has been
designated as anindependent officer of
dip since we have
deemed that there is norisk of a conflict ofinterest with generalshareholders as she is
not involved in dip’s
business and does notreceive remunerationfrom dip as a consultant,accounting specialist, or
legal professional
beyond the customary
remuneration.
Misae Maruyama〇○

As a certified public
accountant, Ms. Misae
Maruyama maintains afair and unbiased
attitude at all times andpossesses a high levelof expertise andpractical experience.
She also has a deep
knowledge of corporate
finance, accounting, andtax affairs through her
experience serving asan outside auditor ofother companies.
Participates in the
Executive Officers
Meeting/Strategy

28

CORPORATE GOVERNANCE

Promotion Meeting,
Sustainability Promotion
Meeting/Human Rights
Awareness Promotion
Meeting/Compliance
Promotion Meeting, andprovides advice from theperspective of Financeand Accounting and risk
management, etc.
We expect her toleverage her broad
insight gained throughher past experience androles in the supervisionof dip’s business
management tostrengthen the decisionmaking functions of theBoard of Directors andaudit and supervisory
functions.
Ms. Maruyama has
been designated as anindependent officer of
dip since there is no riskof a conflict of interest
with generalshareholders as shemeets the Tokyo Stock
Exchange’s criteria for
independence.

[Audit & Supervisory Committee]
Composition of Committee Members and Attribute of Chairperson
No. ofNo. of full-29

No. of internal

No. of outside

Chairperson

CORPORATE GOVERNANCE

committee

time

board

board

members

committee

directors

directors

members
Audit &

Internal andSupervisory

4

1

1

3

Committee

External
Directors

Existence of a board director and employee tosupport the duties of the Audit & Supervisory

Yes

Committee

Matter Concerning the Independence of Said Board Directors and Employees from Executive Directors
dip assigns personnel to support the execution of duties of the Audit & Supervisory Committee at theCommittee’s request or instruction. In such cases, the impartiality of such personnel will be retained sothat they will not be subject to instructions or orders from anyone other than Audit & Supervisory
Committee members and to ensure the effectiveness of the instructions. The consent of the Audit &Supervisory Committee must be obtained when conducting personnel changes or evaluations of such
personnel.
Cooperation among the Audit & Supervisory Committee, Accounting Auditor and Internal Audit Section
The Audit & Supervisory Committee holds meetings with the accounting auditor or the Internal Audit andControl Office on a timely basis to exchange opinions and share information as well as request a reportfrom the accounting auditor or the Internal Audit and Control Office as needed. During the process of andafter the completion of audit by the accounting auditor, the Audit & Supervisory Committee receives areport on the findings of the audit.

[Voluntary Committee]
Existence of voluntary committee equivalent toYes

a nominating committee or compensationcommittee

Establishment of Voluntary Committee, Composition of Committee Members and Attributes of Chairperson
Voluntary committee equivalent to nominating committee
Name of committee

Nomination and Compensation Committee

No. ofNo. of full-No. ofNo. ofNo. ofNo. ofcommittee

timeinternal

outsideinternal

othermembers

committee

board

board

experts

persons

30

Chairperson

CORPORATE GOVERNANCE

members7

directors0

directors
1

6

0

0

Outsideboard
director

Voluntary committee equivalent to compensation committee
Name of committee

Nomination and Compensation Committee

No. ofNo. of full-No. ofNo. ofNo. ofNo. ofcommittee

timeinternal

outsideinternal

othermembers

committee

board

board

experts

persons

members

directors

directors

7

0

1

6

0

Chairperson0Outsideboard
director

Supplementary Information 【Update】
Entrusted by the Board of Directors, the Nomination and Compensation Committee determines
individual director compensation (excluding that for board directors who are Audit & Supervisory
Committee members) and also deliberates and reports on matters related to director nominations andcompensation in response to inquiries from the Board of Directors. The Committee is composed of
the Representative Director, President and CEO and independent outside board directors, who shallaccount for the majority of the members. The Committee members as of May 23, 2024, are Hideki
Tomita, Representative Director, President and CEO; Kuniyoshi Mabuchi, Kanae Takeuchi, and Yuka
Shimada, Independent Outside Directors; and Eriko Tanabe, Yukiko Imazu, and Misae Maruyama,
Independent Outside Director Audit & Supervisory Committee Members. An independent outsideboard director is to serve as chairperson.
Attendance at Nomination and Compensation Committee meetings during the fiscal year ended
February 2024 is as follows:

No. of meetings attended

Attendance rate

Hideki Tomita

3 out of 3

100%

Eriko Tanabe

3 out of 3

100%

Kuniyoshi Mabuchi

3 out of 3100%

Kanae Takeuchi

3 out of 3

100%

Yuka Shimada

1 out of 1

100%

31

CORPORATE GOVERNANCE

Yukiko Imazu

1 out of 1

100%

Misae Maruyama

1 out of 1

100%

(Attendance at Nomination and Compensation Committee meetings during the fiscal year ended
February 2024)

Note: Ms. Eriko Tanabe was appointed as an Independent Outside Audit and Supervisory Committee
Member at the 26th Ordinary General Meeting of Shareholders held on May 24, 2023, and assumed
office on the same day. Therefore, the number of times she attended as an independent outside
director before and after her appointment is shown.
Note: Ms. Yuka Shimada was newly elected as Independent Outside Director at the 26th Annual
General Meeting of Shareholders held on May 24, 2023, and assumed the posts of Independent
Outside Director and Nomination and Compensation Committee member on the same day. Therefore,
the number of meetings she attended is the number of meetings held on and after said date.
Note: Ms. Yukiko Imazu was elected as an Independent Outside Director and member of the Audit
and Supervisory Committee at the 26th Ordinary General Meeting of Shareholders held on May 24,
2023, and was appointed as an Independent Outside Director and Audit and Supervisory Committee
Member and a Nomination and Remuneration Committee Member on the same day.
Note: Ms. Misae Maruyama was newly elected as an Independent Outside Director and member ofthe Audit and Supervisory Committee at the 26th Ordinary General Meeting of Shareholders held on
May 24, 2023, and was appointed as an Independent Outside Director and Audit and Supervisory
Committee Member and Nomination and Remuneration Committee Member on the same day.

[Independent Officers]
Number of independent officers

6

Other Matters related to Independent Officers
dip and its subsidiaries (the “Group”) have established the Standards on Independence of Outside
Board Directors as outlined below. If an outside board director does not fall under any of the following,such outside board director is deemed to be independent of the Group and to have no risk of a conflictof interest with general shareholders.

1. An executive (as stipulated in Item 6, paragraph 3, Article 2 of the Regulation for Enforcement of
the Companies Act. Includes not only executive directors but also employees. Does not include
auditors.) of the Group or an individual who was an executive of the Group within the past 10 years(for individuals who were a non-executive director (a board director who does not correspond to an

32

CORPORATE GOVERNANCE

executive director) or corporate auditor of the Group at any point of time within the past 10 years,
10 years prior to the appointment of such post)
2. A major shareholder of the Group (an individual who holds 10% or more of total voting rights at theend of the previous fiscal year), or an executive thereof
3. An individual whose major business client* is the Group or an executive of such individual
4. A major business client* of the Group or an executive of such business client
5. An accounting auditor of the Group or an individual in charge of the Company’s audit operations as
an employee of the accounting auditor
6. A consultant, accounting specialist, or legal professional who receives money of more than 10
million yen per year or other assets in addition to the customary remuneration from the Group;
provided, however, that in the case that the individual receiving such assets is an organization suchas a corporation or a union, this shall be limited to an individual who is an executive of anorganization whose assets received from the Group account for more than 2% of annual income.
7. An individual who fell under any of 2 to 6 above in the past three years
8. A relation within the second degree of an individual listed in any of 1 to 7 above (limited, however,to a significant individual)
9. An individual whose term in office as an outside officer (an outside board director or an outside
corporate auditor) within the Group exceeds eight years
10. In addition to those stated in the above items, an individual with a special reason that prevents
him or her from fulfilling the duties as an independent outside board director, such as a risk of aconflict of interest with the Group*A major business client refers to a client whose transaction amount in the most recent fiscal year
accounted for more than 2% of consolidated net sales for the year.

In addition to the above criteria, outside board directors are required to possess extensive knowledge
and experience necessary for auditing and supervising the status of Group directors’ compliance withlaws and business management.

[Incentives]
Implementation of measures on incentive

Adoption of performance-linked compensation plan

provision to board directors
Supplementary Information
dip has established a BIP (Board Incentive Plan) trust for executive directors as a performance-linked
compensation. It also offers restricted stock to executive directors.
Decisions regarding the levels of performance-linked compensation, and its percentage relative tobase compensation, are taken after a comprehensive review of the medium/long-term ratio of33

CORPORATE GOVERNANCE

performance-linked compensation to annual compensation and the difficulty of achieving performancetargets, after conducting an objective benchmark comparison that takes into account the scale of dip’s
business, and utilizing a remuneration database aggregated and analyzed by a specialist external
institution.
The BIP trust adopts net sales and operating income, which are dip’s key managerial indicators, at
a 1:1 ratio as performance indicators. The number of shares granted ranges between 0% and 150%
based on the achievement of performance targets.
We have established a Malus clause, which cancels the right of an eligible director to receive said
performance-linked, share-based compensation in the event of a serious violation of duties or internal
regulations during the term of office of the director. In addition, a clawback clause has been
established, enabling the Company to demand the return of said share-based compensation if thefact of said violation is discovered after the compensation has been provided.
The restricted stock compensation adopts net sales and operating income, which are dip’s key
managerial indicators, as performance indicators. The restrictions will be lifted in accordance with theachievement of performance targets, which will be disclosed in the financial results report for the fiscal
year ending February 28, 2027.
A clawback clause has been established, enabling the Company to demand the return of said
restricted stock compensation in the event of a serious violation of duties or internal regulations during
the term of office of the eligible director.

Grantees of stock options

Employees

Supplementary Information
dip issues stock options to its employees with the aim of further bolstering employees’ morale andmotivation to contribute to long-term improvement in corporate value.

[Directors’ Compensation]
Disclosure status

Individual compensation for only some of the board
directors is disclosed.

Supplementary Information
The compensation of those whose total amount of compensation, etc. is 100 million yen or more isindividually disclosed in the Securities Report. Securities Reports and Business Reports are available
for public inspection on dip’s corporate website (available in Japanese only).

Existence of a policy for determining the amountYes

or calculation of compensation
Disclosure of Policy for Determining the Amount or Calculation of Compensation

34

CORPORATE GOVERNANCE(1) Basic policy
The basic policy of the compensation system for dip’s management and board directors, which
excludes that for outside board directors and Audit & Supervisory Committee members who are
expected to perform oversight and supervisory functions with impartiality, is to share value withshareholders, taking into consideration a sufficient level for employing and retaining competentpersonnel while maintaining objectivity and transparency that enable full accountability, and promote
continuous growth of the Company and as well as a medium/long-term increase in its corporate value
through a sound entrepreneurial spirit.
The policy for determining the amount of compensation for individual board directors is set forth
under the above basic policy. The outline is as described below. Said determination policy is decided
by resolution of the Board of Directors based on a report by the Nomination and Compensation
Committee, an advisory body to the Board of Directors chaired by an independent outside board
director and consisting of independent outside board directors in the majority.
The Board of Directors has confirmed that the method of determining compensation details, and thedetails of the compansation, resolved for each individual director for the fiscal year under review areconsistent with such decision-making policy.
<Executive directors>
The compensation system for executive directors consists of cash compensation as the basecompensation and performance-linked compensation aimed at emphasizing the link with dip’s sharevalue and bolstering executive directors’ awareness toward contributing to medium/long-term
performance and corporate value improvement.
The base compensation is determined by multiplying the base amount of the compensation of therepresentative director, president and CEO by a coefficient for each managerial position as prescribedby internal rules.
<Outside board directors and Audit & Supervisory Committee members>
In principle, compensation for outside board directors and Audit & Supervisory Committee members
consists solely of cash compensation as the base compensation to ensure the effectiveness andimpartiality of supervision and audit.
<Policy for each managerial position>
Compensation for the different managerial positions is derived by multiplying the base amount,which is the base compensation for the Representative Director, President and CEO, by a coefficientfor each managerial position prescribed by internal rules. The Board of Directors entrusts thedetermination of the base amount and the coefficient for each managerial position to the Nomination
and Compensation Committee.

(2) Policy concerning performance-linked compensation (non-cash compensation) and its percentage

35

CORPORATE GOVERNANCE

relative to base compensation
dip has established a BIP (Board Incentive Plan) trust and offers restricted stock to executive
directors as a performance-linked compensation.
Decisions regarding the levels of performance-linked compensation, and its percentage relative tobase compensation, are taken after a comprehensive review of the medium/long-term ratio of
performance-linked compensation to annual compensation and the difficulty of achieving performancetargets, after conducting an objective benchmark comparison that takes into account the scale of dip’s
business, and utilizing a remuneration database aggregated and analyzed by a specialist external
institution.
The BIP trust adopts net sales and operating income, which are dip’s key managerial indicators, at
a 1:1 ratio as performance indicators. The number of shares granted ranges between 0% and 150%
based on the achievement of performance targets.
The restricted stock compensation adopts net sales and operating income, which are dip’s key
managerial indicators, as performance indicators. The restrictions will be lifted in accordance with theachievement of performance targets, which will be disclosed in the financial results report for the fiscal
year ending February 28, 2027.

(Target and actual performance for the fiscal year under review)
The target and actual net sales and operating income used for calculating performance-linked
compensation (BIP trust) are as follows:
Indicator

TargetActualNet sales (million yen)

51,95349,378Operating income (million yen)

12,303

11,991(3) Policy concerning the timing and conditions for granting compensation
・Timing of granting compensation
Type of compensation

TimingAnnual salary (monthly

Base compensation
payment)
BIP trustAt retirement

Restricted stock

When restrictions havecompensation

been lifted

Performance-linked
compensation
・Conditions for compensation(BIP trust)
Regarding the BIP trust, eligible directors who have satisfied the prescribed requirements are

36

CORPORATE GOVERNANCE

granted 50% of the dip shares that correspond to their stock delivery points and cash equivalent tothe amount converted to cash within the trust for the remaining 50% of dip shares as said
performance-linked share-based compensation.
We have established a Malus clause, which cancels the right of an eligible director to receive said
performance-linked, share-based compensation in the event of a serious violation of duties or internal
regulations during the term of office of the director. In addition, a clawback clause has been
established, enabling the Company to demand the return of said share-based compensation if thefact of said violation is discovered after the compensation has been provided.
(Restricted stock compensation)
Enrollment conditions and performance-linked conditions are imposed on restricted stockcompensation until the lifting of restrictions.
A clawback clause has been established, enabling the Company to demand the return of said
restricted stock compensation in the event of a serious violation of duties or internal regulations during
the term of office of the eligible director.

(4) Matters concerning the delegation of the determination of compensation
・Determination of customary remuneration for officers
dip’s policy for officers’ customary remuneration is determined by its Board of Directors in view of areport by the Nomination and Compensation Committee.
・Determination of the base compensation amountFrom the perspective of improving objectivity and transparency, the base compensation isdetermined by the Nomination and Compensation Committee, which is entrusted by dip’s Board of
Directors, within the limit of compensation established by resolution of the general meeting ofshareholders, taking into consideration the officer’s managerial position (including the coefficientprescribed by internal rules), responsibilities, and contribution to business performance. The
constituents of the Committee are Hideki Tomita, Representative Director, President and CEO;
Kuniyoshi Mabuchi, Kanae Takeuchi, and Yuka Shimada, Independent Outside Directors; and Eriko
Tanabe, Yukiko Imazu, and Misae Maruyama, Independent Outside Director Audit & Supervisory
Committee Members.
・Determination of performance-linked compensation
The BIP trust is determined separately from the base compensation by resolution of the Board of
Directors within the limit of resolution of the general meeting of shareholders.
The restricted stock compensation is determined separately from the base compensation by
resolution of the Board of Directors within the limit of resolution of the general meeting of shareholders.

(5) Procedures of the Nomination and Compensation Committee

37

CORPORATE GOVERNANCE

Entrusted by the Board of Directors, the voluntary Nomination and Compensation Committee
determines individual director compensation (base amount and coefficients determined for eachposition) and also deliberates and reports on matters related to director nominations andcompensation in response to inquiries from the Board of Directors. The Committee comprises therepresentative director, president and CEO and independent outside board directors, who mustaccount for a majority.
[Support System for Outside Board Directors]
The secretariat of the Board of Directors is in charge of supporting outside board directors. If briefings
to outside board directors are required before meetings of the Board of Directors, the necessary
information is communicated by the secretariat of the Board of Directors. A system has also been
established to enable outside board directors to gather information using an internal communication
tool.

[Status of Individuals that Have Retired from Positions such as President]
Information including the names of counselors, advisors, etc. who previously held positions such aspresident
Form andDate of
Conditions of
Title
Name

Retirement
Description of

Employment

Position(Full-Time or Part-

and

as

Position

Term

President,
Time,
etc.
Paid or Unpaid, etc.)

―

―

―

―

Total number of counselors, advisors, etc. who previously held positions

―

―

0

such as president
Other Matters
dip has not appointed a counselor presently. It commissions a former board director or corporate
auditor as counselor through the required internal procedures if the Board of Directors finds it
particularly necessary for business. The counselor provides advice for and implements the mattersnecessary for managing the Company as commissioned by the Board of Directors. Commissioning acounselor requires a resolution of the Board of Directors. The term of office is one year.

2. Matters related to Functions of Execution of Business, Audit and Supervision, Appointment and
Decisions regarding Compensation, etc. (Outline of the Current Corporate Governance System)【Update】

38

CORPORATE GOVERNANCE

dip has transitioned from a company with an Audit & Supervisory Board to a company with an Audit& Supervisory Committee with the resolution at the 26th Annual General Meeting of Shareholders
held on May 24, 2023. Its aim is to strengthen the auditing and supervision of executive directors andfurther enhance its system of corporate governance by making Audit & Supervisory Committee
members, who are responsible for auditing the execution of duties by board directors, members of theBoard of Directors.

(1) Board of Directors
The Board of Directors, which is the management decision-making organ, consists of nine directors
who possess a high degree of expertise and broad knowledge based on extensive experience. Board
meetings are held on a monthly basis, in principle, and extraordinary Board meetings are held whenneeded to discuss and decide important management matters. By having two-thirds of the Board (sixof the nine board directors) consist of outside directors, whose standpoints are independent of the
management and controlling shareholders, we will strive to enhance supervision of management.
Chairperson:

Hideki Tomita, Representative Director, President and CEO

Board members:

Masatsugu Shidachi, Representative Director and COO, Kuniyoshi Mabuchi,
Kanae Takeuchi, and Yuka Shimada, Outside Directors; Kazuhisa Iwata,
Director and Full-time Audit & Supervisory Committee Board Member; andEriko Tanabe, Yukiko Imazu, and Misae Maruyama, Outside Director Audit &Supervisory Committee Members(2) Audit & Supervisory Committee
The Audit & Supervisory Committee consists of three outside director and Audit & Supervisory
Committee members who possess a high degree of expertise and broad knowledge based on
extensive experience. Three of the four members are outside board director Audit & Supervisory
Committee members. Committee meetings are held on a monthly basis, in principle, and extraordinary
Committee meetings are held when needed. The Audit & Supervisory Committee discusses matters
stipulated by law and the Articles of Incorporation and conducts significant audit operations inaccordance with the audit policy set forth by the Committee. It also strives to enhance the system foraudit and supervision, Board directors who are Audit & Supervisory Committee members attend
important meetings, such as Board meetings, to audit the legality and supervise the adequacy ofboard directors’ execution of duties.
Chairperson:

Kazuhisa Iwata, Director and Full-time Audit & Supervisory Committee
Board Member

Committee members:

Eriko Tanabe, Yukiko Imazu, and Misae Maruyama, Outside Director Audit& Supervisory Committee Members

39

CORPORATE GOVERNANCE(3) Voluntary Nomination and Compensation Committee
The Nomination and Compensation Committee, a voluntary advisory body to the Board of Directors,
deliberates and reports on matters related to director nominations and compensation in response toinquiries from the Board of Directors.
The Committee comprises the representative director, president and CEO and independent outsideboard directors. The latter must account for a majority of the Committee members, and the Committee
must be chaired by an independent outside board director.
Chairperson:

Kuniyoshi Mabuchi, Independent Outside Director

Committee members: Hideki Tomita, Representative Director, President and CEO; Kanae
Takeuchi and Yuka Shimada, Independent Outside Directors; and Eriko
Tanabe, Yukiko Imazu, and Misae Maruyama, Independent Outside Director
Audit & Supervisory Committee Members(4) Accounting auditor
・Name of audit firm: KPMG AZSA LLC
・Consecutive periods of auditing: 14
・Names of certified public accountants involved in auditing:Nobuyuki Ishii, Partner
Hiroshi Uekusa, Partner

3. Reason for Selecting the Current Corporate Governance System
dip has selected the system of a company with an Audit & Supervisory Committee to strengthen theauditing and supervision of executive directors and further enhance its system of corporate
governance by making Audit & Supervisory Committee members, who are responsible for auditing
the execution of duties by board directors, members of the Board of Directors.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize General Meetings of Shareholders and Facilitate the Exercise of Voting Rights
Supplementary information
Early delivery of

dip sends out notices of convocation of its general meeting of shareholders at

notice ofleast 22 days prior to the date of the meeting to ensure that shareholders haveconvocation of

sufficient time to examine the agendas of the meeting, while simultaneously

general meeting of

making efforts to guarantee the accuracy of the information. It discloses theshareholders

contents of the notice of convocation on TDnet and the Company’s corporatewebsite.

40

CORPORATE GOVERNANCE

Setting the date todip sets the date of its general meetings of shareholders to avoid conflict withavoid conflict withother shareholders’ meetings.

other shareholders’meetings
Exercise of voting

dip uses the electronic voting system operated by Mitsubishi UFJ Trust andrights by electronic

Banking.

means
Participation in

dip participates in electronic voting platforms to facilitate the exercise of voting

electronic voting

rights by institutional investors and overseas investors.

platforms and otherinitiatives toimproveinstitutional
investors’ voting
environment
Provision of notice

dip discloses a summary convocation notice in English on TDnet and theof convocation

Company’s corporate website at least 22 days prior to the date of the meeting,(summary) in

simultaneously with the Japanese version.

English2. Investor Relations (IR) Activities
Explanation by
Supplementary information

the representativeof dipCreation anddip has created an IR policy in order to engage inannouncement ofconstructive dialogue with its shareholders. Details of thedisclosure policy

policy are posted on dip’s corporate website.
(https://www.dip-net.co.jp/en/ir/attention/disclosure)Holding regular

dip holds results presentations for analysts and institutional

meetings forinvestors on a quarterly basis on the day of the results

analysts andannouncement.

institutional
investors
Disclosure of IR

dip has set up a page dedicated to IR on its corporatematerials on

website where the latest and past timely disclosure

websitematerials, such as financial results, and materials related to

41

Yes

CORPORATE GOVERNANCE

results announcements (presentation materials, fact sheets,etc.) can be found.
(https://www.dip-net.co.jp/en/ir)
English versions of the timely disclosure materials andmaterials related to results announcements are also
disclosed simultaneously with the Japanese versions.
(https://www.dip-net.co.jp/en/ir)
Establishment of IR

dip has established the IR Office under the Corporate

department (officer)

Communications Division, Corporate Management Group as
the department in charge of IR.

3. Status of Initiatives to Respect the Standpoint of Stakeholders
Supplementary information
Internal regulations

dip’s brand statement, “One to One Satisfaction,” also serves as a guideline forfor respecting thethe Company to satisfy all of its stakeholders. dip declares this brand statement

standpoint ofon its corporate website, etc.

stakeholders
Promotion of

Based on its corporate philosophy, “Here at dip, we want to tap into dreams,

environmental

ideas and passion to create a better society,” dip has established anconservation

environmental policy as a guideline to reduce the environmental impact of its

activities and CSR

business activities and to fulfill its responsibilities toward the realization of aactivities

sustainable society.
<Environmental Policy>
https://www.dip-net.co.jp/en/esg/environment/E003

IV. Matters concerning the Internal Control System
1. Basic Concept and Status of the Internal Control System
1. Ensuring Director and Employee Compliance with Laws, Regulations and Articles of Incorporation(1) dip has established a Basic Policy on Compliance and takes steps to instill the policy among all
board directors and employees to ensure that their execution of duties complies with laws, regulations
and the Articles of Incorporation and to enable them to execute their duties while respecting social
responsibilities and corporate ethics.
(2) dip has independent outside board directors account for two-thirds of its Board of Directors tostrengthen oversight functions concerning the fairness of execution of duties.
(3) The Compliance Section, Governance Promotion Department, Corporate Administration
Management Division, Corporate Headquarters is responsible for compliance and the maintenance42

CORPORATE GOVERNANCE

and improvement of the compliance system. Specifically, it offers regular training programs as well as
creating and distributing manuals to board directors and employees in order to improve knowledge
and awareness related to compliance.
(4) dip has developed a whistle-blowing system for employees with the aim of detecting violations oflaws and the Articles of Incorporation quickly and redressing them.
(5) dip rejects all relationships with anti-social forces. To ensure this, it designates the BusinessSupport Department, Personnel & General Affairs Division, Personnel & General Affairs Group as thesection responsible for responding to anti-social forces and establishing rules for responses. It is also
prepared to respond resolutely to emergencies by cooperating with specialized external agencies
such as the police.
(6) The Audit & Supervisory Committee members and the Internal Audit Office work in conjunction
with each other to audit and supervise the status of the compliance system on a regular basis andreport to the Board of Directors.

2. Retention and Management of Information regarding the Execution of Duties by Board Directors
Information regarding the execution of duties by board directors shall be appropriately and surely
retained and managed over a prescribed period of time and also made searchable and viewable inaccordance with the Document Management Rules and other internal rules.

3. Rules and Other Systems for Risk Management
dip establishes a system for business risk management based on the Corporate Risk Management
Rules. In the event of a critical situation in business activities, dip sets up a task force under the CEO’scommand to make swift and accurate responses as well as a system to minimize loss or damage.
Against risks related to the handling of personal information, in particular, dip has set up a department
and manager responsible for information management, who carry out trainings of employees andinternal audits on a regular basis as well as maintaining and improving the management system basedon the Privacy Mark and Information Security Management System (ISMS) certifications dip has
already acquired.
4. Ensuring Efficiency in the Execution of Duties by Board Directors
The CEO, COO, Service Officer, CIO, CTO, CHO, CFO, CPO and heads of groups conduct careful
and flexible decision-making according to the decision-making authority stipulated in internal rules. In
addition, dip ensures efficient decision-making by the Board of Directors, the CEO, COO, Service
Officer, CIO, CTO, CHO, CFO, CPO and heads of groups by deliberating matters at Corporate Officers
Meetings and Strategy Promotion Council meetings to identify managerial issues at an early stage.
Efficient and swift business execution is pursued through the introduction of a corporate officer

43

CORPORATE GOVERNANCE

system and a group system and in accordance with the Organization Regulations and Rules on the
Division of Duties and Authority.
5.

Ensuring Appropriate Operations of the Corporate Group consisting of the Company and its

Subsidiaries(1) The Group emphasizes the importance of the Basic Policy on Compliance stipulated by dip to all
employees in order to establish a compliance system for the entire Group.
(2) dip dispatches board directors or corporate auditors to subsidiaries, who will audit and supervise
the execution of duties by board directors at the subsidiaries.
(3) Prior reporting to the Board of Directors and the approval thereof are required when carrying out
transactions with Group companies. Upon approving said transactions, they are compared withgeneral business conditions to prevent the deliberations at Board meetings from being arbitrary andthe transactions from being disadvantageous to dip. Experts are consulted as needed.
(4) The Internal Audit Office conducts internal audits of subsidiaries to ensure the propriety of theiroverall operations.
(5) dip and its subsidiaries hold regular meetings to share important information on the Group’s overall
corporate management. dip approves or receives reports on important business executions at thesubsidiaries in accordance with rules on subsidiary management.
6. Ensuring the Reliability of Financial Reporting
In order to ensure the propriety of the Group’s financial reporting, the Group establishes an internal
control system for valid and appropriate submission of internal control reports in accordance with the
Financial Instruments and Exchange Act. It also continuously evaluates whether the system functions
properly and makes amendments as needed.

7. Matters concerning Employees Who Support the Duties of Auditors where Required by the Audit &Supervisory Committee, the Independence of Such Employees from Directors, and Ensuring theEffectiveness of Instructions to Such Employees
dip assigns personnel to support the execution of duties of the Audit & Supervisory Committee at
the Committee’s request or instruction. In such cases, the impartiality of such personnel will be
retained so that they will not be subject to instructions or orders from anyone other than Audit &Supervisory Committee members and to ensure the effectiveness of the auditors’ instructions. The
opinions of the Audit & Supervisory Committee are respected when conducting personnel changes or
evaluations of such personnel.

8.

Systems Designed to Enable Directors (Excludes directors who are members of the Audit andSupervisory Committee) and Employees to Report to the Audit & Supervisory Committee and Other

44CORPORATE GOVERNANCE

Systems concerning the Reporting to the Audit & Supervisory Committee
In the event of the emergence of a fact that causes substantial damage to the Group or a risk
thereof, or an occurrence of a situation that significantly discredits the Group, a material defect orproblem concerning the system or procedures of internal control, a violation of law or other illegal act,
or a material unjust act, the board directors and employees of the Group immediately report to the
Audit & Supervisory Committee in writing or orally. Furthermore, Audit & Supervisory Committee
members are allowed to inspect the minutes and proceedings documents of various meetings suchas the Corporate Officers Meeting and request reports from the Group’s board directors andemployees.
The Governance Promotion Department, Corporate Administration Management Division,
Corporate Headquarters, which is in charge of the whistleblowing system, reports to the Audit &Supervisory Committee on the status of whistleblowing within the Group on a regular basis.

9. Ensuring the Prevention of Unfavorable Treatment of Informants of the Preceding Paragraph Due
to Reporting
dip stipulates in regulations and responds appropriately so that the Group’s board directors andemployees will not be treated unfavorably due to making a report of the nature described in thepreceding paragraph to the Audit & Supervisory Committee.

10. Matters concerning Policies on the Handling of Expenses or Debts Resulting from the Executionof Duties by Audit & Supervisory Committee Members, including Procedures for Advance Payment or
Indemnification of Expenses
When an Audit & Supervisory Committee member requests dip indemnification of expenses
resulting from the execution of his/her duties pursuant to Article 399-2, paragraph (4) of theCompanies Act, dip responds to such request except in cases where it proves that such request is
not necessary for the execution of the duties of such Audit & Supervisory Committee member.

11. Ensuring Effective Auditing by the Audit & Supervisory Committee(1) Audit & Supervisory Committee meetings are held at least once a month.
(2) In addition to scheduled Audit & Supervisory Committee meetings, the Audit & Supervisory
Committee members hold meetings as needed.
(3) The Audit & Supervisory Committee meets with the accounting auditor or the Internal Audit andControl Office on a timely basis to exchange opinions and information and request a report from theaccounting auditor or the Internal Audit and Control Office as needed.
(4) The Audit & Supervisory Committee receives reports from external experts (lawyers, tax
accountants, etc.) on risks facing the Group in meetings with such parties.

45

CORPORATE GOVERNANCE

2. Basic Approach toward the Exclusion of Anti-Social Forces and Establishment of Internal
Structures
1. Basic Approach toward the Exclusion of Anti-Social Forces
dip rejects all relationships with anti-social forces and groups that pose a threat to social order andsecurity.
2. Establishment of Internal Structures for the Exclusion of Anti-Social Forces
dip has designated the Business Support Department, Personnel & General Affairs Division,
Personnel & General Affairs Group to supervise responses to anti-social forces and appointed aperson in charge of preventing undue demands. It has established a network for cooperation withspecialized external agencies such as the police and lawyers for its daily information gathering andresponding to any incidents that occur. Guidelines for addressing undue demands have already been
established but will be appropriately revised according to changes in the environment. At the sametime, dip has added clauses for the exclusion of anti-social forces in basic transaction agreements toprevent transactions with anti-social forces in its ordinary business and to immediately stop any
unforeseen transaction it discovers.

V. Others
1. Adoption of Anti-Takeover Measures
Adoption of anti-takeover measures

No

Supplementary Information―

2. Other Matters related to Corporate Governance System, etc.
<System for Information Disclosure>
1. Basic Approach to Timely Disclosure
dip defines information on its business, operations and results that has a significant impact on
securities investment decisions as “material information” and discloses it on a timely basis incompliance with relevant laws and regulations including the Companies Act and the Financial
Instruments and Exchange Act as well as the Timely Disclosure Rules of the Tokyo Stock Exchange.
Furthermore, dip goes beyond the Timely Disclosure Rules, etc., and will voluntarily and actively
disclose information that is deemed to affect stock prices and investment decisions through the Tokyo
Stock Exchange (TDnet) and dip’s corporate site.
Information disclosed at briefings or individual meetings will be limited to facts disclosed to the
public, facts that are in the public domain, facts pertaining to the general business environment andthe like. No reference whatsoever will be made to undisclosed "material information".

46

CORPORATE GOVERNANCE

2. System for Timely Disclosure
Whenever a decision is made or an event occurs that may be subject to timely disclosure, thedepartment in charge consults in advance with the IR Office of the Corporate Communication Division,
Corporate Management Group. The IR Office determines whether or not timely disclosure isnecessary, and if it is determined that timely disclosure is necessary, prepares the appropriatematerials in cooperation with relevant departments such as the Accounting and Finance Division andthe Legal Affairs Division before disclosing them following a review by the Information Handling Officer.
With regard to results information, the Accounting and Finance Department, Business
Administration Management Division, the Corporate Management Group will take the initiative in
preparing disclosure materials, which will be disclosed by the IR Office following approval from theBoard of Directors and a review by the Information Handling Officer.

[Flow Chart (Reference Material)]

47

CORPORATE GOVERNANCE[Skill Matrix of Board of Directors and Audit & Supervisory Committee (Reference Material)]

Notes: Mses. Kanae Takeuchi, Yuka Shimada, Eriko Tanabe, Yukiko Imazu, and Misae Maruyama arefemale officers. Ms. Kanae Takeuchi is internationally minded from her many years of living abroad andthrough her extensive experience as a broadcaster for new programs and interviewer of corporate
executives.
The chart above is not necessarily a representation of all the relevant experience and expertise held by each
officer.

(Note) English documents are prepared as a courtesy to our stakeholders. In the event of any inconsistency
between English­language documents and the Japanese­language documents, the Japanese­language
documents will prevail.

48